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LESSONS LEARNED -- “Koch World reboots,” by Kenneth P. Vogel, with Maggie Haberman: “The Koch brothers’ political network spent hundreds of millions to win the White House and the Senate – and came up empty. So they did what any smart business executives would do: ordered up an audit. … Americans for Prosperity, the Kochs’ main political outlet, parted ways with its chief operating officer, most of its 100-plus-employee field staff and several fundraisers. Generation Opportunity, a Koch-backed youth mobilization effort, recently replaced its president. Charles and David Koch’s network also is withholding cash from some groups pending the full audit results, and it has postponed both of its signature donor conferences this year. The pressure isn’t just coming from the inside. California regulators are issuing subpoenas and demanding phone and business records in an investigation that could reveal the secret donors funding some Koch-linked groups or even result in those donors becoming targets themselves. And David Koch has told friends he is weary of being pilloried … as the personification of the corrupting influence of money in politics. …

“Top Koch operative Kevin Gentry emailed associates after the election about ‘a growing belief that one of the Obama campaign’s competitive advantages was their analytical approach to almost all of their messaging’ while others in Koch World have hinted at a more decentralized and below-the-radar strategy. … They’ve blessed the formation of a new secret money non-profit group, the Association for American Innovation, POLITICO has learned. It will be run by former top AfP strategist Alan Cobb and will wage a behind-the-scenes push in state capitols for reforms consistent with the brothers’ small government, free enterprise philosophy, including possibly curbing union power and abolishing income taxes.

“Americans for Prosperity is moving forward with a new initiative to block the implementation of Obamacare, and has hinted it may get involved in congressional primaries for the first time in 2014, which could pit it directly against Rove’s effort. The brothers’ operation also has signaled continued commitment to a host of non-profit groups established in the last few years under a section of the tax code – 501(c)4 – that allows donors to remain anonymous. There’s a voter data-mining effort called Themis, a Hispanic voter targeting outfit called Libre Initiative and a fiscal watchdog called Public Notice.”

--N.Y. Times col. 1, “Court Takes Case On Overall Limit In Election Cash,” by Adam Liptak: “The Supreme Court on Tuesday agreed to hear a challenge to federal campaign contribution limits, setting the stage for what may turn out to be the most important federal campaign finance case since the court’s 2010 decision in Citizens United, which struck down limits on independent campaign spending by corporations and unions. The latest case is an attack on the other main pillar of federal campaign finance regulation: limits on contributions made directly to political candidates and some political committees. … It challenges only aggregate limits — overall caps on contributions to several candidates or committees — and does not directly attack the more familiar basic limits on contributions to individual candidates or committees. …

“The case was brought by Shaun McCutcheon, an Alabama man, and the Republican National Committee. Mr. McCutcheon said he was prepared to abide by contribution limits to individual candidates and groups, which are currently $2,500 per election to federal candidates, $30,800 per year to national party committees, $10,000 per year to state party committees and $5,000 per year to other political committees. But he said he objected to separate overall two-year limits, currently $46,200 for contributions to candidates and $70,800 for contributions to groups, arguing that they were unjustified and too low.” http://nyti.ms/VIuJmD

THE YEAR AHEAD – “Baucus, Camp pressing on with Tax Code overhaul,” by Jake Sherman and Steven Sloan: “The two powerful committee chairmen are moving full-speed ahead with plans to overhaul the Tax Code despite the fact that nearly everyone in Washington thinks such major reform is very unlikely this year. [Rep. Dave] Camp, a Republican and chairman of the House Ways and Means Committee, and [Sen. Max] Baucus, the head of the Senate Finance Committee, are dancing a tango. … Last week, Camp unveiled 11 … bipartisan working groups aimed at a Tax Code overhaul on subjects ranging from small business to energy. … Baucus and other Finance Committee members are working feverishly to develop tax reform option papers or draft legislation that can be circulated in the spring. And Baucus plans to meet weekly soon with Democratic Sens. Patty Murray of Washington state and Barbara Mikulski of Maryland, leaders of the Senate Budget and Appropriations committees, respectively. … Lobbyists say they are telling their clients that tax reform is in the offing in a bid to seal pricey contracts to protect precious tax preferences and loopholes. …

“Whether the chairmen can succeed in building momentum for tax reform will be one of the defining issues of the 113th Congress … Failing to move on tax reform in any way would be a major problem for Republicans, who have been touting an overhaul since their days in the House minority. The House GOP leadership is most concerned about failure on an issue that is key to the Republican brand. They’re worried about their members taking politically toxic votes on eliminating popular personal and corporate preferences and reform then stalling in the Senate … Camp convened a marathon Valentine’s Day hearing that considered politically fraught questions surrounding the fate of the deduction for charitable contributions. … Camp released a draft bill that would upend the tax structure for complex products like financial derivatives — grabbing headlines about Republicans cracking down on Wall Street.” http://politi.co/15ueJpy

**A message from Environment America: President Obama has the authority to drastically cut carbon pollution from dirty power plants. More than 3.2 million Americans have already told his administration to act. It's time for the President to lead on climate change: http://www.environmentamerica.org/LeadOnClimate **

SEQUESTERWATCH:

--FRAME GAME -- WashPost 1-col. lead, “As cuts near, focus is on blame: JOCKEYING FOR THE HIGH GROUND – Obama, Republicans shift to finger-pointing,” by Zachary A. Goldfarb: “Obama on Tuesday surrounded himself with firefighters and other first responders at the White House, where he said Republicans would be at fault if the spending reductions take effect and cost the jobs of emergency personnel. The campaign-style event marked the beginning of what aides described as an intensifying push to pressure Congress to postpone the cuts — or to blame Republicans in Congress if it doesn’t. … If the cuts are instituted and Americans do not see them as a major problem, that could serve as an affirmation of the GOP view that the government is unnecessarily big and a hindrance to private-sector growth. If there is a significant backlash, public sentiment is likely to shift toward the Democrats, who generally see the government as a positive force.” http://wapo.st/ZqPjst

--WHAT ACTUALLY HAPPENS -- “U.S. government won't fall apart on 'sequester' day of reckoning,” by Reuters’ Richard Cowan and David Lawder: “While some furlough notices will be issued to government workers, there will be few outward signs on March 1 that the cuts have been launched. Under the law, retirees are shielded and so their Social Security checks will arrive on schedule at the beginning of March and every month thereafter. Similarly, the elderly and the disabled will not see their federally backed Medicare healthcare curtailed at all over the seven months. Every U.S. soldier will get paid and the Defense Department will be allowed to shift funds to ensure that combat operations and ‘critical military readiness capabilities’ are not degraded, according to the Obama administration. Unofficially, many members of Congress are betting that a few weeks into the automatic spending cuts, Democratic and Republican leaders will get serious about negotiating a replacement to the sequestration and the $85 billion in spending cuts will not have had time to really bite. …

“[O]n March 1 and in the days immediately after, while no dramatic shakeup is anticipated, there will be some early tremors. * Government agencies are likely to issue 30-day warnings of impending furloughs of government workers. They could be told that starting on April 1 they will have to stay home for a maximum of 22 days between March 1 and Sept. 30. * New government contracts could slow in anticipation of no deal being reached to replace the sequestration. This would hit defense contractors and road and bridge builders alike. * Members of Congress, who are not exempt from the spending cuts, will be advised to begin preparing their staffs for either salary cuts or layoffs if they have to shave funds from their approximately $4 billion in annual appropriations.” http://reut.rs/13dW3GN

--SPEAKER BOEHNER OP-ED in Wall Street Journal, “The President Is Raging Against a Budget Crisis He Created”: “Both parties today have a responsibility to find a bipartisan solution to the sequester. Turning it off and erasing its deficit reduction isn't an option. What Congress should do is replace it with other spending cuts that put America on the path to a balanced budget in 10 years … The president's sequester is the wrong way to reduce the deficit, but it is here to stay until Washington Democrats get serious about cutting spending. … So, as the president's outrage about the sequester grows in coming days, Republicans have a simple response: Mr. President, we agree that your sequester is bad policy. What spending are you willing to cut to replace it?”

OBAMA 2.0 -- “Analysis: Choices loom for Obama on climate change,” by AP’s Dina Cappiello: “In his toolbox are things as small as requiring appliances to be more efficient and as big as controlling the largest single source of heat-trapping emissions: the carbon pollution from the nation's coal-fired power plants. … One of the more expensive options available to Obama is regulating greenhouse gases from the oldest, dirtiest coal plants, which are already struggling to compete with cheap natural gas. Whether operators choose to shut them down or invest in pollution controls, the cost is likely to raise electricity rates.” http://yhoo.it/Y8ZDR7

TOP TALKER – “'Zero Dark Thirty's' sharp turn from Oscar glory,” by L.A. Times’ Steven Zeitchik and Nicole Sperling, with Ken Dilanian in D.C. (ran A1 Tue.): “Its wild ride offers a telling portrait of the 21st-century news cycle and how it can play havoc with a studio's carefully laid campaign. Beginning with newspaper op-eds in early December — and continuing when U.S. Sen. Dianne Feinstein (D-Calif.) released a letter excoriating the movie for its depiction of torture — ‘Zero Dark’ became the subject of a relentless attack from politicians and pundits. Critics said the film incorrectly asserted that torture played a role in the capture of Osama bin Laden. The firestorm hit even before the film opened nationwide--and just as Oscar voters were marking their nomination ballots. Sony and the filmmakers faced a dilemma: … Should they respond forcefully to the criticism and attempt to wrest control of the narrative? Or remain relatively quiet and try not to stoke the flames? Sony opted for the latter, partly concerned that fanning the flames would keep moviegoers away. And while the gambit paid off — the movie has grossed $85 million in the U.S. — the strategy appears to have hurt the film on the awards front. En route to Sunday's Oscars, ‘Zero Dark’ has been nearly shut out of awards — save for a Golden Globe and a Writers Guild prize …

“[Feinstein’s] condemnation stuck in the craw of the filmmakers, who believed they were caught up in a larger Washington drama; Feinstein's intelligence committee had just approved a classified report criticizing CIA interrogations. ‘The [lawmakers] hijacked the marketing of the film with what, to my mind, was an intellectually dishonest publicity ploy,’ [screenwriter Mark] Boal said. … The filmmakers, who maintained that their movie takes no explicit position on torture, wanted to reply, and expressed that in a series of meetings with Sony and its awards consultants … But the studio was concerned that a prolonged debate could deter moviegoers from coming out to see the film--would people want to see a movie if they were constantly being reminded by news headlines that it featured scenes of torture. They pleaded for silence until the Jan. 11 national release, hoping the furor would die down.” http://lat.ms/Yz8WK8

**A message from Environment America: President Obama has the authority to drastically cut carbon pollution from dirty power plants. More than 3.2 million Americans have already told his administration to act. It's time for the President to lead on climate change: http://www.environmentamerica.org/LeadOnClimate **